On December 31, 2014, Convenient Cabs Incorporated was granted 10 taxi licences by the City of Somerdale, at a cost of $1,000 per licence. It is probable that Convenient Cabs will receive the expected future economic benefits of the taxi licences. There is an active market for taxi licences in Somerdale.
(a) Prepare the journal entry to record the costs incurred.
(b) Discuss how the licences are accounted for after initial recognition if Convenient Cabs follows ASPE.
(c) Discuss how the licences are accounted for after initial recognition if Convenient Cabs follows IFRS.